Dubai expat Narendra Gajria lost his wife, Dh1 million savings blocked in banks

Dubai expat Narendra Gajria lost his wife, Dh1 million savings blocked in banks

Do you have a joint bank account with your spouse?

If you think you are playing it safe by doing so, then take some time out to rethink as experts say otherwise.

Take the case of Dubai expat, Narendra Garjria whose Dh1 million was blocked in his UAE bank accounts after his wife, Heena died at a young age of 47. Besides the fact that he had little time to mourn her death, Gajria found himself stuck in the UAE with no money. Reason being, the couple had joint bank accounts with various banks in UAE and no sooner she (Heena) died, Dubai Courts as part of the procedure to issue a succession certificate to the legal heirs temporarily blocked their accounts.

This meant Gajria could not withdraw money from the ATM, make online transactions or use his card to purchases like grocery and other basic essentials for daily sustenance. Worse, he did not have a separate bank account in his name through which he could conduct transactions.

“I had close to a million dirhams in various bank accounts which was blocked. As soon as I realised the accounts were blocked, I rushed to one of the banks I was dealing with and opened an account in my name. I put whatever little money I had in hand into that account. I came back to my office and provided my new account details. Luckily for me, the next day was pay day. So I received some money into that account.”

Gajria told Gulf News that it took five months for his money from the various accounts to come back to him.

“My wife and I did not have a will made in the UAE. There was a will in India, but that was not valid here as it did not cover monies and investments here in the UAE. Dubai Courts transferred his monies, however, five months later and distributed it to the heirs on the Sharia Law principle. So my son received 50 per cent, my daughter 25 per cent and I received 25 per cent. This was not a problem for me as it is not an issue because it is all in the family.”

Gajria said he never imagined having a joint account would cause inconvenience. “Back home in India, it is common for couples to have joint bank accounts. If you see the terms are usually Mr. and or Mrs. …., either or survivor. I assumed this would be the scenario here as well. The whole reason I did a joint account with my wife was to secure both our futures. So what transpired after her death was actually a revelation.”

So what happens when an account holder dies
Gajria explained: “When somebody dies, the successor has to go to the court to apply for a succession certificate. For this, the successor has to fill out a form at the court and give details of your bank accounts. The moment this is submitted, the court give order to freeze the bank accounts. It actually happens within a few hours of submitting the form. The funds from the bank account is transferred to courts. Once the court does its due process, the monies are distributed to the account holder’s successors. If the deceased has a registered will in the UAE, the monies will be distributed according to the will. In the case there is no will, the Shariah Law come into effect. In my case since we did not have a will, the Shariah Law was applied.”

Maintain seperate individual accounts
Ali Haddad, head of Haddad & Associates and chairman at Lawyer Business Group recommended everyone in the UAE to have single individual bank accounts in their names, rather than having joint bank accounts. “It is practical and safe in the case if anything untoward happens to one of the account holders. Moreover, ensure there is enough money in the individual account to take care of emergencies. Remember when your account freezes, you cannot pay your bills, your rental allowance, school fees.”

Mohammad Marria, managing director of Just Wills said: “People assume freezing accounts following the death of an account holder is a Shariah Law principle. Actually it is not so as countries like Canada, South Africa Italy and other also freeze accounts when an account holder dies.”

Single vs joint bank accounts
“Having a joint bank account is common practice amongst expats in the UAE. Most expats have joint bank accounts in their home-country and therefore prefer to do the same when the step out of UAE as well. But rules are different here in the UAE. What expats are not aware is that here in the UAE, unlike perhaps their home country, in the case of an eventuality where one of the account holder dies, the joint bank account is frozen or blocked,” said Marria.

“Most banks can open a savings account for your partner, however, please ensure the account is in a different bank to where your partner has an account,” he explained.

How is the bank informed
The human resources department where the employee worked usually informs the bank regarding his death. This is done on a priority especially in the case where the employee had taken a bank loan and there are outstanding dues. “The surviving account holder has to inform the bank if there is any mortgage on the property in order to clear any loan outstanding,” said Marria.